The BGA India Team, led by Managing Director Ratan Shrivastava, wrote an update to clients on the interim budget of Prime Minister Narendra Modi’s government, which is seeking parliamentary approval for expenditures in the first four months of financial year 2024-25.


  • The government’s last budget, in the run-up to the general elections to take place between March-May 2024, is being hailed by the corporate sector and markets for shunning populism while sticking to the fiscal consolidation road map and broadening the country’s tax base. Through a record capital expenditure allocation of 3.4 percent of GDP ($134 billion), the government has conveyed its long-term commitment to key sectors, including infrastructure, clean energy, health care, semiconductors and transportation.
  • India remains a bright spot amid global economic uncertainty, with advance estimates of 7.3 percent real GDP growth in financial year 2023-24. The International Monetary Fund has projected 6.5 percent growth in financial year 2024-25 and expects India to become the third-largest economy by 2027. Despite global headwinds and possible impacts on trade, the country is likely to leverage domestic growth catalysts to maintain momentum.


  • Finance Minister Nirmala Sitharaman announced several sector-specific initiatives, showcasing the government’s confidence in winning a third consecutive victory and indicating policy continuity. The budget establishes an inclusive framework and places a strong emphasis on technology-enabled economic growth, focusing on women, youth and the poor. It also underscores social justice through universal access to housing, water, electricity, cooking gas, bank accounts and financial services.
  • Several strategic initiatives were announced to achieve net-zero carbon emissions in India. The government intends to unveil a detailed economic development road map in July, emphasizing its commitment to transform the eastern states into growth engines and enhance the country’s demographic dividend.


  • The budget provides a conducive environment for global investors, sovereign funds, pension funds and offshore banking units. Tax benefit for such funds’ units in Gujarat International Finance Tec-City (GIFT City) could attract new global players, encouraging foreign investment in infrastructure projects and enhancing the national monetization pipeline. Capital tax exemption for GIFT City units could lead to expansion in offshore banking units, integrating India with the global financial market. Exception to interests and royalty by aircraft and ship-leasing companies to nonresidents in GIFT City could further boost the aviation and shipping industries.
  • The budget underscores the commitment to establish India as a global hub for manufacturing, further integrating with the global value chain. A substantial increase in production-linked incentive allocation for semiconductors, electronics, pharmaceuticals, electric vehicles and food processing signals the government’s focus on attracting global manufacturers in sunrise sectors; allocations across semiconductors, electronics and information technology, pharmaceuticals and food processing increased by nearly 360 percent, 36 percent and 26 percent, respectively.

We will continue to keep you updated on developments in India. If you have questions or comments, please contact BGA India Managing Director Ratan Shrivastava at

Best regards,

BGA India Team